Published 4:00 am, Monday, March 26, 2001

As the Bush administration and a divided Congress tussle over the levers of power, biotech lobbyists are getting their first sense of how the political jockeying will affect issues near and dear to the industry's heart.

LATEST BUSINESS VIDEOS

Report: Amazon’s US audience for Prime Video is Around 26 millionWibbitz

Science Reveals that Pizza Increases ProductivityBuzz 60

Trump blocks Qualcomm takeover by BroadcomEuronews

Here's the Scariest New Tech of 2018 So FarBuzz 60

Goodyear Presents New Tire Technology Designed for Electric VehiclesAutomotoTV

Nike to Investigate Workplace Behavior, Announces President will ResignWibbitz

Toys R Us Shutting Down Business In The USAssociated Press

The FBI Is Using Best Buy’s Geek Squad As InformantsFortune

Millennial Habits May Soon Bring An End to Passwords New Study ShowsVeuer

Mueller's Russia probeFox5

Although a Medicare drug benefit has been demanded by elderly voters and promised by both parties, the political situation favors gridlock over the compromise it would take to create a costly new entitlement program.

This may disappoint the elderly, but it is frankly not a big issue for biotech. Today's biotech medicines are generally administered in the hospital and are covered by Medicare's hospitalization benefit. The hue and cry over prescription drug costs has been aimed at outpatient medicines made by the big drug companies on the East Coast and in Europe.

Feldbaum and Rawls said the Medicare stalemate might prompt lawmakers to offer stopgap measures to provide consumers some relief on drug prices. The most likely scenario would be for lawmakers to pass a new bill allowing U.S. drug wholesalers to reimport drugs from Canada.

I say reimport because these would be drugs made in the United States and shipped to Canada, where price controls imposed by Canadian authorities make many pills less expensive there than here. Thus, shipping pills back and forth across the border could still result in lower prices than pills shipped from U. S. factories direct to U.S. consumers. Go figure.

In any event, the biotech industry doesn't have a dog in that fight, either.

Biomedicines are likely to be exempted from any reimportation bill because biotech drugs must be refrigerated. Thus there are safety issues in the back- and-forth shipping of biomedicines that don't apply to the reimportation of pills.

Speaking of safety, the BIO guys hope such concerns will give Congress pause as lawmakers start thinking about authorizing the manufacture of generic biologic medicines -- a category that does not currently exist by law or in the marketplace.

Here's the scoop. All medicines are protected by patents. No company can legally make a patented medicine except the patent holder. In 1984, Congress passed the Hatch-Waxman Act, which spelled out how other manufacturers could make less expensive generic drugs when medicines go off patent.

But when the bill was passed, biomedicines were in their infancy. Now, as the first biotech patents near their expiration dates, Congress must spell out the ground rules for creating biologic generics. Sen. Orrin Hatch, R-Utah, and Sen. Charles Schumer, D-N.Y., have both expressed interest in the issue, but no bills have been drafted.

BIO will argue that making generic pills is simpler than brewing biotech medicines, and thus Congress can't insert the word "biotech" into the Hatch- Waxman Act and be done with it. Pills are made from chemicals, BIO argues. The techniques for chemical synthesis are mature. Biomedicines are fermented in processes that are relatively new. BIO has been floating the notion that makers of generic biologics should have to do years' worth of clinical trials to prove their medicines are equivalent to the patented brand.

"Some people see this as a price issue, but we view it as a safety issue," Feldbaum said.

Call me sentimental, but I get warm and fuzzy just thinking that there are vested interests, prowling the corridors of power, looking out for my safety and well-being.

Actually, the biotech industry faces a choice. It could drive this needed legislation in a sensible direction, because making proteins is more complicated than making pills. Or it can use the safety issue to stall generic biologics as long as possible. This is a high-stakes issue, for companies and consumers, that will play out over several years.

Meanwhile, lawmakers will be preoccupied with hot-button topics such as stem cell research and human cloning. In fact, hearings on cloning are scheduled this week.

The stem cell issue has both political and commercial ramifications. Anti- abortion groups are pressuring the Bush administration to stop stem cell research, which can rely on cells taken from aborted fetuses. Biotech interests want to advance a technology that could lead to the growth of new heart cells in petri dishes, for instance, to repair the old pump when it fails.

The White House would like to settle the stem cell issue so neither appointee gets mired in controversy from the start. Yet the delay causes a leadership vacuum in two posts vital to directing research and getting new medicines on the market.

Ahhh, springtime in Washington. No wonder Beltway types love to visit California. Here the only dangers are earthquakes and blackouts.

BOSTON BAKED BIOTECH: After last week's puffy column on biotech lab construction in Mission Bay and South San Francisco, Jack Crowley, a strategic planner at Affymetrix Corp. in Santa Clara, wanted to make sure I didn't overlook Boston, where bio is booming -- and perhaps could outstrip the Bay Area.

The Boston metro area has many of the same characteristics that favored the Bay Area: a critical mass of university researchers (Harvard and MIT), a confluence of venture capital and a core of larger companies that provide executive talent for startups. Biogen, Genzyme, Millennium Pharmaceuticals and Vertex Pharmaceuticals are all Boston-area firms at the forefront of biotechnology.

Boston and the Bay Area have competed before. Silicon Valley and Route 128 were rivals in the early days of the high-tech era before the West Coast outstripped the East Coast.

But it's by no means clear the Bay Area will remain the epicenter of biotechnology. Boston is closer to biomedical clusters in New Jersey and Maryland and was more heavily involved in the Human Genome Project, which has spawned many startups. And though Beantown doesn't have our balmy weather, neither does it have rolling blackouts.

Since size does matter, I asked Scott Morrison, manager of the biotech consulting practice at the Palo Alto office of Ernst & Young, if Boston is poised to surpass the Bay Area as a biocenter.

"In terms of critical mass, the Bay Area is still ahead, but it is safe to assume the growth rate is higher in Boston," Morrison said.

E&Y currently counts 72 publicly traded biotech firms in the Bay Area compared to 56 in Massachusetts. And that excludes San Diego, another emerging biocenter.

Morrison offered another indicator of the Bay Area's biotech stature. During the biotech bull market that began in December 1999, 76 companies completed initial public offerings. Of these, 21 were Bay Area firms, seven were from San Diego and six from Boston.

That being said, Morrison said the intramural jostling between U.S. biocenters overlooks the impressive growth of biotech clusters abroad. The most notable example is Germany's BioRegio. Five to seven years ago there was very little entrepreneurial activity there. Today, BioRegio is home to 300 biotech startups, Morrison said.

Every country and continent has aspirations of nurturing a biotech industry.

India, for instance, an emerging power in the software industry, is trying to jump-start biotech. Singapore is laying plans to lure biotech talent. "Overnight, biotech has become a truly global industry," Morrison said.